PM SVANidhi Yojana: Empowering Street Vendors with Financial Inclusion

The Prime Minister in her recent interview praised the PM SVANidhi Yojana, terming it as empowering the street vendors of India. Initiated in June 2020 by the Ministry of Housing and Urban Affairs (MoHUA), the scheme has turned out to be a lifeline of lakhs of vendors that were hit hard by the Covid-19 pandemic. The scheme is provided by the Small Industries Development Bank of India (SIDBI), the scheme aims to provide affordable working capital loans, digital transaction benefits, and incentives for repayment, thereby enabling vendors to restore and expand their livelihoods.

Context

On 1 st June 2020, PM SVANidhi Yojana was introduced as a central-sector scheme involving micro-credit to street vendors. Its major aim is to help in enabling the vendors to be self-sustaining by providing funds to them as well as encouraging digital transactions.

Key Points

Loan Assistance: Street vendors can avail working capital loans up to ₹10,000 repayable in one year.

Interest Subsidy: Timely/early repayment provides an interest subsidy of 7% annually through DBT.

No Penalty: No charges on early repayment of loan.

Digital Incentives: Cashback up to ₹100 per month for digital transactions.

Credit Escalation: Credit limit can be increased on timely repayment.

Flexible Usage: Loan can be used for raw materials, rent, or equipment purchases.

Data Point

Coverage & Reach

• Beneficiaries: Lakhs of street vendors across India.

• Agency: Implemented by SIDBI under MoHUA.

• Scope: Supports both urban and peri-urban vendors.

Eligibility Criteria

• Vendors with Certificate of Vending/Identity Card issued by ULBs.

• Vendors identified in surveys but not issued certificates.

• Vendors with Letter of Recommendation (LoR) by ULB/TVC.

• Peri-urban/rural vendors vending within ULB limits with LoR.

Government Position

• The scheme is an enabler for self-reliance and livelihood security.

• Emphasis on inclusion of left-out and peri-urban vendors.

Expert View

• The scheme addresses pandemic-hit livelihoods.

• Focus on building digital financial discipline among vendors.

Broader Significance

• Supports Atmanirbhar Bharat vision.

• Strengthens the urban informal economy by formalizing credit access.

• Promotes transparency through DBT and digital incentives.

Conclusion

The PM SVANidhi Yojana has been successful as it is part of the government to ensure that they both secure and empower the urban informal sector. The scheme was a major instrument of empowering the vendors through timely repayment incentives, digital push, and inclusive coverage. The greater effects are its contribution in supporting financial inclusions and livelihood resilience of a group ensuring that street vendors continue to form an important component of the urban economy in India.